Friday, May 08, 2015
10:41 AM

Today we see a snap back from last month's report on both establishment jobs and household survey employment. Last month the household survey came in at an anemic 34,000. This month it is 192,000.

Part-time employment went up by 198,000 meaning the entire increase in household survey employment was part-time.

Finally, March nonfarm payrolls were revised lower from 126,000 to 85,000.

This snap back is nowhere near as big as it appears at first glance. It will take at least another month to see if weakness in March was the start of something or an outlier.

Interesting Details

The Bloomberg Consensus jobs estimate was for 220,000 jobs, nearly right on target. The estimate range was a wide 180,000 to 335,000. There is lots of optimism from some economists.

Bloomberg: The April employment report is mixed and probably won't be pulling forward expectations for a Fed rate hike. Nonfarm payroll growth came in about as expected, at a soft 223,000. But there is a substantial downward revision to what was already an extremely weak March, from 126,000 to 85,000. The good news is another downtick in the unemployment rate, to 5.4 percent from 5.5 percent and reflecting a favorable mix led by a rise in those finding jobs.

Details of the payroll data show a very large 45,000 rise in what has been a depressed construction sector. This is one of the largest monthly gains of the recovery and may point to springtime acceleration for construction and new housing. Professional business services added a strong 62,000 jobs with temporary services up a solid 16,000 for its best gain of the year.

You cannot play (at least you should not play the gain in construction both ways). If the weakness was weather-related then a snap back in construction should have been expected. Some but not all of the recent weakness was weather related. Construction probably was more affected than services.

Total nonfarm payroll employment increased by 223,000 in April, and the unemployment rate was essentially unchanged at 5.4 percent. Job gains occurred in professional and business services, health care, and construction. Mining employment continued to decline.

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Unemployment Rate - Seasonally Adjusted

Nonfarm Employment

Nonfarm Employment Change from Previous Month by Job Type

Hours and Wages

Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees declined by 0.1 hour to 33.3 hours.

Average hourly earnings of production and non-supervisory private workers rose $0.02 at $20.90. Average hourly earnings of production and non-supervisory private service-providing employees rose $0.02 at $20.69.

Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment

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Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 5.4%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 10.8%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.

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